Industrial Real Estate Posting Significant Gains

On March 20, 2022, the news program “60 Minutes” presented a segment on considerable increases in the rental of single-family homes. The program further pointed out that residential real estate rents increased by 10-50% increase from last year due to a lack of inventory. Fortunately, Los Angeles had a 10% increase in rents, which is a very high number considering our home prices are some of the highest homes in the country.

It’s inviting to tap into the worth of your rental property by raising rents as property values continue to increase to historic levels. The California rent increase laws, on the other hand, specify how often and by how much you can raise the rent. If you own or manage a rental property in California, you’ll need to keep up with the current rules and regulations controlling rent and rent increases.

These increases in residential rent not only forced 1st time home buyers to delay their potential quest to purchase a home but also forced renters to consider other ways to keep a home over their head.

Rent Increases also Affect Commercial Real Estate

This increase in prices has carried over to the sweetheart of the commercial real estate business, industrial real estate. In the last 12 months, I have seen rents in industrial real estate pop by at least 33%. An example of this market increase is where I leased a property 12 months ago in the South Bay area of Los Angeles for .88 cents per square foot triple net. A comparable building came on the market today at $1.80 per square foot triple net. In this case, I think the broker is being very aggressive but I have seen similar increases in Culver City, LAX, and even Santa Fe Springs.

These extraordinary increases can have a devastating impact on the tenant staying in business and for new start-up companies, a reason to stay in their garage. In addition, when a tenant is currently leasing industrial property and their lease is about to expire, they may see their rent increasing by 100%.

In addition to these huge increases in rent, there seems that the current inventory in Los Angeles County and surrounding counties, the inventory of industrial vacancies is less than 2%. Therefore, tenants must plan for these increases or plan on relocating out of state.

This is a great time for landlords, but the tenant is in a very precarious position.

Commercial Real Estate Expert Witness

As an industrial and commercial real estate expert, Lee works with industrial and commercial real estate stakeholders, including tenants, property owners, developers, lawyers, consultants, asset managers, and facilities managers. As a property owner himself, President and CEO Lee Segal has personally experienced the financial burdens of vacancies and property management issues. As a result, he intimately understands the nuances of the business and handles each client’s industrial and commercial real estate property as if it were his own. Contact Lee Segal today for your commercial real estate expert witness services.

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